The announcement by the FSB, Russia‘s security service, that it has opened "an
espionage investigation" on the basis of Andrei Lugovoi’s recent
accusations, is an unexpected twist in an already highly convoluted story.

The Palestinian President
Mahmoud Abbas dissolved the "national unity government" last night
and sacked its Prime Minister Ismail Haniyeh after an especially savage day of
internecine violence ended with Hamas in control of the Gaza Strip.

Mr Abbas’s move, which Fatah
hopes will underpin its dominance of the West Bank after the near-total defeat
of its forces in Gaza, underlined the growing separation of the two Palestinian
entities and prompted talk among some Israeli analysts of a "three state
solution" ­ involving Israel, Gaza and the West Bank.

Hamas Radio underlined Mr
Abbas’s lack of control over Gaza when it said the faction had taken control of his
presidential compound, a symbolic last redoubt of Fatah power in Gaza.

Hamas’s internal grip on Gaza was consolidated yesterday after it captured the
headquarters of the Fatah-dominated Preventative Security force and two other
security bases and took effective control in the southern border town of Rafah, in a bloody day of fighting which cost 32 Palestinian
lives. Three bodies were found under the rubble of a Fatah-controlled security
building in Rafah which had been overrun by Hamas.

In a decree announced by one of
his senior aides, Tayeb Abdel Rahim, in Ramallah ­ and swiftly dismissed by
Hamas officials in Gaza ­ Mr Abbas declared a formal state of emergency, said he
was dissolving the woefully ineffective Fatah-Hamas coalition brokered by Saudi Arabia three months ago and promised to form a new government
in its place.

But it had been the battle for
the headquarters of Preventative Security in GazaCity which was the bloodiest as well as the most decisive in
Hamas’s relentless four-day campaign to take control of Gaza. This was not least, according to witnesses, because of
a murderous aftermath in which several Fatah activists were dragged from the
building and executed in the street.

Television pictures had earlier
shown some of Hamas’s Fatah captives being marched along the street with their
hands in the air. The Hamas spokesman Sami Abu Zuhri denied reports of
executions and insisted: "Whoever was killed was killed in clashes."

He added the Islamic group had
been forced to wrest control from Fatah because its security services were
corrupt and generated chaos. But a Fatah official said that Hamas shot dead
seven of its fighters outside the building and a doctor at ShifaHospital said that he had examined two bodies shot in the head at
close range.

Neither the official nor the
medic were prepared to give their names for fear of reprisals. A witness,
Amjad, also declined to give his full name when he told the Associated Press
from his home: "They are executing them one by one. They are carrying one
of them on their shoulders, putting him on a sand dune, turning him around and
shooting."

The headquarters has a symbolic
importance for Hamas beyond its role as a key military bastion and the bloody
assault on the compound appeared to be in part a settling of scores more than a
decade old. It was Preventative Security that spearheaded Yasser Arafat’s
famous crackdown on his Hamas opponents in the mid-1990s. It was also in this
building that the interrogations took place in which Hamas figures of the time
­ like Mahmoud Zahar who until a few months ago was the Palestinian Foreign
Minister ­ are alleged to have been humiliated and tortured by the Fatah
forces.

Some of the masked Hamas gunmen
kissed the ground after the building was captured amid thankful cries of
"Allah Akbar". Hamas TV said the Preventive Security building would
be turned into an Islamic college and displayed a room packed with what the
station said was wire-tapping equipment.

The attack came after five days
of fighting which have cost 90 Palestinian lives and seen both sides carrying
out other summary executions, throwing opponents from the upper floors of
high-rise buildings, hijacking ambulances to use as military vehicles, and
engaging in gunfire inside the precincts of hospitals.

The dire impact of the conflict
on Gaza‘s 1.5 million inhabitants was underlined when the
European Commission suspended aid projects because of the escalating violence.

Mr Haniyeh reaffirmed his belief
in the national unity government in a television broadcast early today and
insisted it would continue to the " best of its abilities". He
appealed once again for the release of Alan Johnston, the kidnapped BBC
journalist. And he went out of his way to dismiss the idea that a separate
Palestinian state could be created in Gaza.

Fatah leaders who were blamed by
Mr Haniyeh for undermining the national unity government came under criticism
from local commanders for absenting themselves from the Strip during the
fighting.

In the West Bank Fatah militants
rounded up nearly 90 Hamas fighters in the first such effort to reassert its
authority since the Arafat crackdown in 1996. Issam Abu Bakr, a Fatah leader in
the West Bank city of Nablus, said: " There was a decision by the leaders of the
security forces to go after Hamas and to arrest them, before they think of
bringing the war here."

The near-rout of Fatah in Gaza is a signal setback to the US-led policy of trying to
bolster Fatah forces with money, training and equipment, while continuing the
total isolation of Hamas despite increasing signs of strain between the
political and the military wings.

While the former appeared ready
to try to make the national unity government work, the latter argued that it
had failed to achieve a lifting of the international boycott.

Israeli officials were quoted as
saying that Ehud Olmert would tell President George Bush that Gaza and the West
Bank will now have to be
treated differently, and that the military would need to enforce a "
separation policy" between the two Palestinian entities.

In fact, even in relatively
peaceful times, Gaza has been almost totally separated from the West Bank.
The comprehensive agreement which Condoleezza Rice thought she had brokered in
November 2005, and which included provisions for "safe passage" from Gaza to the West
Bank, has not been implemented.Israel retains control of Gaza‘s crossings, territorial waters, and airspace.

Nevertheless the Israeli hints
suggested the possibility of a "West Bank first" policy of trying to
reach agreements with Mr Abbas which ignore Gaza.

In terms of progress to a
long-term settlement there are paradoxes in this approach, because there is
little to negotiate about over Gaza, which is bounded by pre-1967 borders and where there
are no longer any settlements. Negotiations about Jerusalem and the borders between Israel and the West
Bank are much more fraught.

The forces behind this eruption
of violence

Who and what are Fatah and
Hamas?

Fatah, formed in the 1950s by
Yasser Arafat, started as an armed liberation movement trying to take control
of the whole of historic Palestine. But after finally recognising Israel it took part in
the Oslo accords in the early 1990s in the hope of a two-state solution in
which Israel would give up the territory it seized in 1967 to make way for a
Palestinian state on the pre-1967 borders.

Fatah ran the Palestinian
Authority set up under Oslo and lost the PA elections partly because it was
seen as inefficient and corrupt, and arguably, partly because it had failed to fulfil
its ambition of a Palestinian state. Hamas, formed in 1987 was a Palestinian
offshoot of the Muslim Brotherhood, committed then – and by its charter now –
to establishing an Islamic state in the whole of historic Palestine.

It gained popularity both
through its commitment to armed actions against Israel, from the mid-1990s, including suicide bombings against
civilians, with the result that it was labelled a terrorist organisation by
most of the Western world, and for its administration of a social welfare
network.

It has resolutely refused to
recognise Israel but its political spokesmen have spoken of a long-term
truce in return for a Palestinian state on 1967 borders. Elected to a
parliamentary – and therefore cabinet – majority in January 2006.

How come they are fighting now
if they are supposed to be in government together?

The bitter rivalry between the
two groups, partly compounded by the refusal of elements in Fatah to accept the
results of the 2006 elections, had spilled into serious violence, resulting in
some 160 deaths, at the turn of the year, an outbreak supposed to have been
stopped by the Saudi-brokered Mecca deal which formed the new "national
unity" coalition. But it was a shotgun wedding, based on the deep desire
of the Palestinian population for security and the allocation of ministerial
posts rather than a joint political programme. And second, it looks as though
neither Mahmoud Abbas the (Fatah) President or Ismail Haniyeh the (Hamas) Prime
Minister have been able to exercise full control of their forces.

How did the latest round of
fighting start?

Almost impossible to identify a
single moment though there were a number of incidents on 8 June, including the
violent kidnappings of two Hamas figures by Fatah gunmen, a bodyguard to Mr
Haniyeh and a doctor, who were respectively beaten and shot and wounded.

A Fatah activist was also shot
dead by Hamas gunmen after they complained he had been among gunmen who
attacked Hamas supporters outside a mosque. But these incidents were triggers
rather than causes.